Add TIPS (TIP) to the list of safe-havens proving to be anything but as this sort of...

Add TIPS (TIP) to the list of safe-havens proving to be anything but as this sort of inflation-protection doesn't work when rates rise but inflation doesn't. The rout has sent the yield on 10-year TIPS into positive territory for the first time since Dec. 2011, reports Carolyn Cui. Investors have pulled $7.2B out of TIPS ETFs this year, already more than the $5.2B inflow for all 2012.

I can't believe how many people think a TIPS mutual can't lose value. My thinking was that there was a 10% capital risk when rates started rising. We've seen more than 6% already in 45 days.

However, I still contend that buying and holding TIPS to maturity (supplemented by I Bonds) is extremely conservative. You know exactly the return you will get, plus inflation, and you can ignore the secondary market and 'duration' is not relevant.

If inflation is muted, you have a lousy investment but no loss of money, at all. It is a logical way to preserve capital.